Shareholders of Strategic Storage Trust IV Inc., a publicly registered non-traded real estate investment trust, have approved the merger with affiliated REIT, SmartStop Self Storage REIT Inc., in an all-stock transaction valued at $370 million. The merger, which was proposed in November 2020, is expected to close around March 17, 2021.
Strategic Storage Trust IV will merge into a newly formed subsidiary of SmartStop, creating a company with a portfolio of 136 properties and a combined gross book value of approximately $1.5 billion of self-storage assets.
At a special meeting held on Wednesday, nearly 5.7 million shares voted in favor of the merger, 131,500 voted against, and 355,600 abstained.
Per the merger agreement, SmartStop will acquire all of the real estate owned by Strategic Storage Trust IV, consisting of 24 wholly-owned self-storage facilities located across nine states, and five joint venture properties in various stages of development located in the Greater Toronto Area.
The total Strategic Storage Trust IV portfolio, including joint venture property estimates at completion of development, represents approximately 22,500 self-storage units and 2.6 million net rentable square feet.
In late April 2020, Strategic Storage Trust IV suspended the primary portion of its public offering, citing uncertainty relating to the ongoing COVID-19 outbreak and its potential economic impact.
Under the terms of the agreement, Strategic Storage Trust IV stockholders will receive 2.1875 shares of SmartStop common stock for each share of common stock they own. This exchange ratio represents an increase of $0.10 per share from Strategic Storage Trust IV’s most recent estimated net asset value, when compared to SmartStop’s most recent estimated NAV of $10.40 per share.
Strategic Storage Trust IV’s most recent NAV per share is $22.65, calculated as of March 31, 2020. Shares were originally priced at $25.00.
The transaction values SST IV at approximately $370 million, based on September 30, 2020 share counts and debt principal balances outstanding. Following the transaction, SmartStop stockholders will own approximately 64 percent of the combined company, Strategic Storage Trust IV stockholders will own approximately 25 percent, and management will own approximately 11 percent.
SmartStop Self Storage REIT Inc., formerly known as Strategic Storage Trust II Inc., is a self-managed REIT that sponsors self-storage programs, including Strategic Storage Trust IV and other private programs. SmartStop has approximately $1.7 billion of real estate assets under management. SmartStop launched its initial public offering in January 2014 and raised $566 million in investor equity prior to closing in January 2017.
Strategic Storage Trust IV owns 24 properties comprising approximately 18,000 self-storage units, as well as one operating property and three parcels of land under development. The REIT’s offering was declared effective in March 2017 and raised approximately $243.2 million in investor equity, as of April 17, 2020.